We all expect the seller to handle those Estate Agent fees, right? After all, they're the ones who hired the agent to sell their home, so they should be the ones footing the bill. But lately, more and more buyers have been expressing their annoyance at being asked to pay some fees when buying a property. Sadly, there's no law preventing Estate Agents from charging buyers, like you, fees for their services, unlike letting agents who are restricted from doing so. Whether it's morally right or not is up for debate, but one thing's for sure—it feels pretty cheeky if you're interested in buying a property, and the potential fees are kept secret until you're ready to make an offer or even later. That's not cool and only adds to the negative perception some people have of Estate Agents. It affects all buyers, but First Time Buyers especially don't expect this, since they haven't been through the buying process before.
So, what kind of fees might you encounter as a buyer? One of the most common ones nowadays is a fee to cover the cost of Anti-Money Laundering vetting. This is basically the checks done on you to make sure you are who you say you are (Identification and Verification checks) and its been mandatory since 2017 for EAs to also carry them out. So if you have an offer accepted on a home, be prepared to go through these checks with the Estate Agent. But guess what? Your solicitors and mortgage lender will require these checks to be done too, and none of them talk to each other, so you'll be doing AML checks at least three separate times! They all have their own policies and criteria and they all need to conduct these checks independently, so unfortunately there is no chance of merging them all together and getting them done once, at least not in the near future.
Some Estate Agents handle these checks in-house, but smaller agencies often outsource the task to external parties, which naturally charge a fee for their service. Many EAs cover this cost themselves or pass it on to the seller, which seems fair. However, there are some agents who go a step further and pass this cost onto potential buyers, or even worse, add an extra margin on top of the service charge. Not cool, right? And sometimes, buyers are only informed of these costs when they're ready to make an offer or after it's been accepted. Which can come across as a trap, especially if not communicated transparently up front!
Here's the thing—you can't avoid the AML checks; they're a legal requirement. But you can avoid feeling trapped by unexpected fees by being proactive and asking the right questions. When you book a property viewing with an Estate Agent, simply ask upfront if there will be any fees you, as the buyer, could be expect to pay at any point. Armed with this knowledge, you can decide if you're comfortable dealing with that agent and paying fees like this from the EA or if you'd rather explore properties with other agents who don't charge buyers. Being informed gives you the power to make the right choices and avoid any unpleasant surprises down the line. And budget for hidden fees like this.
The journey of buying your first home shouldn't feel like a constant game of gotcha, it should be smooth and enjoyable. Be in the know, stay empowered, and find your perfect place without feeling like you've been caught in a web of hidden fees.